GAO discussed the possible implications of proposed legislation that would give new personnel flexibility to the Internal Revenue Service (IRS).

GAO noted that: (1) it examined two bills that would give IRS new flexibilities in managing its workforce: H.R. 2676 and S. 1174; (2) the bills are similar in that both would give IRS additional flexibilities relating to performance management, staffing, and the development of demonstration projects; (3) until the Commissioner of IRS develops an implementation plan, acting in accordance with both the new legislation and those provisions of Title 5 to which IRS would remain subject, and has some experience in implementing the new flexibilities, there is no way to predict just how helpful the new flexibilities may be in improving IRS' actual performance; (4) GAO believes that H.R. 2676 appropriately gives IRS the opportunity to factor in other measures, such as customer service results and employee behavior; (5) the proposals for new personnel flexibility at IRS are a part of a broader set of proposals to restructure the agency and improve its performance; (6) GAO has recognized that to manage effectively for results, agencies need the flexibility to manage according to their needs and mission; (7) GAO also found that, over the years, Title 5 has evolved to give federal agencies more flexibility than they once had--and often more then they realize-- to tailor their personnel approaches to their missions and needs; (8) the merit principles and certain other national goals such as veterans' preference remain generally applicable to employees of all agencies; (9) both H.R. 2676 and S. 1174, while giving new personnel flexibilities to IRS beyond those already available to it under Title 5, would specifically require that the agency continue to conform to the merit principles and other national goals; (10) the proposals in H.R. 2676 and S. 1174 have been developed to provide IRS exceptions from various Title 5 personnel requirements that IRS believes impede its ability to accomplish its mission; (11) the bills' provisions encouraging IRS to align its employees' performance with IRS mission and goals are consistent with other public- and private-sector organizational trends that have been given congressional endorsement through the passage of the Government Performance and Results Act; and (12) these proposals do not make clear the Office of Personnel Management's role of ensuring IRS' continued compliance with the merit principles.

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